Correlation Between Cogeco and Income Financial
Can any of the company-specific risk be diversified away by investing in both Cogeco and Income Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cogeco and Income Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Inc and Income Financial Trust, you can compare the effects of market volatilities on Cogeco and Income Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cogeco with a short position of Income Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco and Income Financial.
Diversification Opportunities for Cogeco and Income Financial
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cogeco and Income is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Inc and Income Financial Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Financial Trust and Cogeco is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cogeco Inc are associated (or correlated) with Income Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Financial Trust has no effect on the direction of Cogeco i.e., Cogeco and Income Financial go up and down completely randomly.
Pair Corralation between Cogeco and Income Financial
Assuming the 90 days trading horizon Cogeco Inc is expected to under-perform the Income Financial. In addition to that, Cogeco is 1.5 times more volatile than Income Financial Trust. It trades about -0.27 of its total potential returns per unit of risk. Income Financial Trust is currently generating about 0.05 per unit of volatility. If you would invest 865.00 in Income Financial Trust on November 5, 2024 and sell it today you would earn a total of 11.00 from holding Income Financial Trust or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogeco Inc vs. Income Financial Trust
Performance |
| Timeline |
| Cogeco Inc |
| Income Financial Trust |
Cogeco and Income Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco and Income Financial
The main advantage of trading using opposite Cogeco and Income Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco position performs unexpectedly, Income Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Income Financial will offset losses from the drop in Income Financial's long position.| Cogeco vs. Cogeco Communications | Cogeco vs. Quebecor | Cogeco vs. Transcontinental | Cogeco vs. Stella Jones |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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